- Date : 25/04/2022
- Read: 4 mins
LIC is India's largest insurance company and the seventeenth-largest insurance company in the world. It will go public in April-May. If you are a policyholder of LIC, you will most likely receive a discount on the issue price. You should start preparing for the IPO as an investor and LIC policyholder.
A company doing business can raise funds from investors or banks. It can do so publicly or privately. When a company has established its business and wants to raise funds to expand further, it can announce its IPO. Initial Public Offering (IPO) is the selling of the company's shares to the public in the primary market. Post-IPO, an unlisted private company gets listed publicly on the stock exchange. The company's shares are then freely traded in the open market.
Last year, 63 companies got listed on the exchanges in India and many more are expected to do so this year. As an investor, an IPO is a good way to buy the shares of a company at the issue price, when there is good potential for growth.
Why should you invest in an IPO?
Below are some of the benefits of investing in IPO:
- Listing gains - If you want to invest your money for the short term and to get good returns, an IPO is one of the best investment options. However, you should be careful in picking the right IPO.
- Long-term goals - If a financially sound company with good growth potential is getting listed, you can invest in its shares through the IPO and stay invested to meet your long-term goals.
- Fair price - IPO pricing is determined using fair evaluation. Once the company is listed and its shares traded in the open market, it is difficult to determine if the stock price is high or fair. So if you want to invest in a company's shares at its fair evaluation price, an IPO is the right avenue.
Also Read: How IPOs Differ From NFOs?
LIC IPO: What it means to a policyholder
India's biggest IPO is going to launch soon, and as a policyholder, you too can invest in the company. LIC is India's largest insurance company and the seventeenth-largest insurance company globally. It will launch its IPO in April-May. If you are a LIC policyholder, you are likely to get a discount on the issue price. As an investor and LIC policyholder, you should start preparing for the LIC IPO. Currently, market experts estimate that policyholders would get a discount of around 10% on the LIC IPO issue price.
Also Read: Different Types Of IPO Investors
HOW TO INVEST IN LIC IPO?
Get yourself ready
The first thing you need to do is link your PAN with your policy as part of the KYC (Know Your Customer) compliance. The PAN linking with the policy was to be done by February 28, 2022. However, the window is expected to open again before the IPO. Open a DEMAT account, if you don't have one. You can open an account with any stock brokerage.
How to Link PAN with LIC Policy?
Visit the https://linkpan.licindia.in/UIDSeedingWebApp/ and give details like your DOB, Gender, Email ID, PAN, Name, Phone Number, etc.
Tick the Declaration and acceptance button, and verify the process using the OTP. Once verified, your LIC policy account will get linked to your PAN.
If you have already linked PAN and LIC policies, you can check the status to ensure everything is in place before you apply for the IPO.
Conclusion
The LIC IPO was earlier supposed to launch in March but was delayed due to the Russia-Ukraine conflict. It is now expected to launch in April or May. You can open your DEMAT account until then, and link your PAN with your LIC policy. You can apply for the LIC IPO even without linking your PAN with your policy but a DEMAT account is mandatory.
For policyholders, there is a 10% reservation of the share offer and most likely a discount of 10% on the issue price. It means that if you are an existing policyholder, your chances of getting the shares are slightly higher if you apply early enough. Everything you need to prepare for the IPO can be done online, so you will be all set to invest in the IPO once it launches.
A company doing business can raise funds from investors or banks. It can do so publicly or privately. When a company has established its business and wants to raise funds to expand further, it can announce its IPO. Initial Public Offering (IPO) is the selling of the company's shares to the public in the primary market. Post-IPO, an unlisted private company gets listed publicly on the stock exchange. The company's shares are then freely traded in the open market.
Last year, 63 companies got listed on the exchanges in India and many more are expected to do so this year. As an investor, an IPO is a good way to buy the shares of a company at the issue price, when there is good potential for growth.
Why should you invest in an IPO?
Below are some of the benefits of investing in IPO:
- Listing gains - If you want to invest your money for the short term and to get good returns, an IPO is one of the best investment options. However, you should be careful in picking the right IPO.
- Long-term goals - If a financially sound company with good growth potential is getting listed, you can invest in its shares through the IPO and stay invested to meet your long-term goals.
- Fair price - IPO pricing is determined using fair evaluation. Once the company is listed and its shares traded in the open market, it is difficult to determine if the stock price is high or fair. So if you want to invest in a company's shares at its fair evaluation price, an IPO is the right avenue.
Also Read: How IPOs Differ From NFOs?
LIC IPO: What it means to a policyholder
India's biggest IPO is going to launch soon, and as a policyholder, you too can invest in the company. LIC is India's largest insurance company and the seventeenth-largest insurance company globally. It will launch its IPO in April-May. If you are a LIC policyholder, you are likely to get a discount on the issue price. As an investor and LIC policyholder, you should start preparing for the LIC IPO. Currently, market experts estimate that policyholders would get a discount of around 10% on the LIC IPO issue price.
Also Read: Different Types Of IPO Investors
HOW TO INVEST IN LIC IPO?
Get yourself ready
The first thing you need to do is link your PAN with your policy as part of the KYC (Know Your Customer) compliance. The PAN linking with the policy was to be done by February 28, 2022. However, the window is expected to open again before the IPO. Open a DEMAT account, if you don't have one. You can open an account with any stock brokerage.
How to Link PAN with LIC Policy?
Visit the https://linkpan.licindia.in/UIDSeedingWebApp/ and give details like your DOB, Gender, Email ID, PAN, Name, Phone Number, etc.
Tick the Declaration and acceptance button, and verify the process using the OTP. Once verified, your LIC policy account will get linked to your PAN.
If you have already linked PAN and LIC policies, you can check the status to ensure everything is in place before you apply for the IPO.
Conclusion
The LIC IPO was earlier supposed to launch in March but was delayed due to the Russia-Ukraine conflict. It is now expected to launch in April or May. You can open your DEMAT account until then, and link your PAN with your LIC policy. You can apply for the LIC IPO even without linking your PAN with your policy but a DEMAT account is mandatory.
For policyholders, there is a 10% reservation of the share offer and most likely a discount of 10% on the issue price. It means that if you are an existing policyholder, your chances of getting the shares are slightly higher if you apply early enough. Everything you need to prepare for the IPO can be done online, so you will be all set to invest in the IPO once it launches.
